Pseudoepitheliomatous hyperplasia in chronic inflammation has long been difficult to diagnose. Competent pathologists have occasionally been surprised by the spontaneous healing of a lesion which they had diagnosed squamous cell carcinoma microscopically. The result is that some pathologists have taken the stand that a lesion of this type is a carcinoma only if it is not a specimen from an ulcer on the leg or if it is not associated with chronic granuloma. In order that the difference between pseudoepitheliomatous hyperplasia and true epithelioma can be appreciated, one must consider the diagnostic characteristics of each. Borrmann1 wrote that in early epithelioma of the skin there is a definite transformation of the cutis, which is correlated with and even precedes the invasion by the acanthotic epidermis. Therefore, the changes in the cutis may not be considered a result of epithelial hyperplasia. Ribbert2 thought the downward growth of epithelium and